Comment Texas, here they come! (Score 4, Insightful) 240
Wealth taxes sound logical but fail in practice for reasons that are structural, not incidental.
Modern billionaire wealth is not a pool of cash but unrealized appreciation in stock, private equity, and assets held inside foundations, trusts, and holding companies that never die and never sell.
The wealth is real in terms of power and influence but does not exist in any form that is liquid, personally owned, or straightforwardly valued.
Asking someone to pay 5% annually on a private company stake or a foundation's art collection requires first agreeing what it is worth, then finding the cash to pay the bill, neither of which has a clean answer.
Europe ran this experiment for decades. Sweden, Germany, France, Austria, Finland, Denmark and others all introduced wealth taxes and most have abolished them, citing capital flight, administrative chaos, and the fundamental impossibility of consistent valuation across asset classes.
France's ISF drove thousands of wealthy residents abroad before Macron scrapped it in 2017 explicitly because it cost more than it raised. Germany's was ruled unconstitutional in 1995 on valuation grounds alone.
The deeper problem is that the effective tax rate on a correctly structured fortune is already close to zero before any wealth tax is contemplated. You borrow against your portfolio to live, generating no income.
Everything is owned by immortal entities that never trigger a realization event. The rate on zero is always zero, and a wealth tax on assets that are not personally owned, cannot be objectively valued, and cannot be liquidated without market disruption is not a revenue solution. It is a political statement.
